SINGAPORE: Singapore’s non-oil domestic exports (NODX) grew 16.1 per cent in June from a year ago, bolstered by shipments of pharmaceuticals, specialised machinery and electronics.
The jump is a reversal of May's revised 4.6 per cent decline, and higher than the 6.2 per cent increase forecast by economists in a Reuters poll.
On a month-on-month seasonally adjusted basis, NODX rose by 0.5 per cent in June after a revised 4.6 per cent fall in May, Enterprise Singapore said in a media release on Friday (Jul 17).
While June's figure was also boosted by a low base last year when NODX contracted 17 per cent, it "heralds well for the restarting of the economic engine after the 'circuit breaker' period", said Ms Selena Ling, head of treasury research and strategy at OCBC Bank.
"The June NODX data suggests that the worst may be over," she said.
READ: Singapore’s economic situation remains dire, with recovery likely to be ‘slow and uneven’: MAS
STRONG PHARMACEUTICAL EXPORTS
In June, electronic shipments rose by 22.2 per cent from a year earlier. This was boosted by exports of disk media products, which rose 59.8 per cent; telecommunications equipment, which increased 37.8 per cent; and integrated circuits, which expanded 29.1 per cent.
Non-electronic exports, which rose 14.5 per cent, were helped by demand for non-monetary gold, specialised machinery and pharmaceuticals.
Exports of non-monetary gold grew by 238 per cent, specialised machinery at 45.9 per cent and pharmaceuticals at 30.8 per cent.
UOB economist said Barnabas Gan said he expects strong pharmaceutical exports to continue for the rest of this year.
"Singapore’s role in international efforts to combat COVID-19 will continue to support the city-state’s manufacturing and export environment," he said.
"Looking ahead, Singapore’s move to build up its diagnostics, vaccines and therapeutics development, as well as bolster vaccine manufacturing capacity in 2H20 are clear evidences for strong biomedical production and export momentum in the foreseeable future," he added.
Shipments to Singapore's top 10 export markets grew across the board in June, with the exception of Hong Kong, Indonesia and Thailand.
Exports to Japan rose the most by 94.7 per cent, led by demand for pharmaceuticals, synthetic rubber and waste as well as personal computers.
This was followed by South Korea at 85.6 per cent, mainly due to specialised machinery, measuring instruments and integrated circuits.
However, NODX to emerging markets fell by 28.8 per cent. Shipments to Latin America fell the most at 53.5 per cent, followed by South Asia at 39 per cent and the Middle East at 18.9 per cent.
FULL-YEAR NODX LIKELY TO EXPAND
Ms Ling said that barring a return to lockdowns around the globe, she expects full-year NODX growth to outperform Enterprise Singapore's forecast of -1 per cent to -4 per cent.
"But do not expect the double-digit NODX growth momentum to be sustained into the second half," said Ms Ling.
"The road ahead is yet to be completely smooth sailing as external risks remain, namely with the second COVID-19 waves of infections seen to be slowing down the pace of reopenings in Hong Kong and some US states for example, and the need for continued generous life support from major central banks and policymakers," she added.
Mr Gan said that he is also "now hopeful for a potential positive growth" in NODX for the year, barring an exacerbation of COVID-19 infections across Singapore’s key trading partners.
UOB has raised its NODX outlook to grow by 4 per cent this year, compared with its previous estimate of a 1 per cent contraction.
However, Mr Gan also cautioned that uncertainty surrounding the COVID-19 pandemic and heightened geopolitical-led concerns remain significant, and continue to cloud Singapore’s trade prospects.